It is not necessary to hope in order to undertake, nor to succeed in order to persevere. (Charles the Bold)

December 22, 2003

Second Minoo Masani Memorial Lecture by N. Vittal at Chennai on November 20, 2003

I attended the second Minoo Masani Memorial Lecture on November 20 at the Bharatiya Vidya Bhavan auditorium in Chennai, organised by the Indian Liberal Group. The speaker was former Chief Vigilance Commissioner, N. Vittal and topic of his lecture was "Corruption mocks at liberalisation".

The text of Vittal's speech was distributed at the end of the talk and is available here. But Vittal was adding extempore to the written text very often during the speech and I will try and cover some of very interesting thoughts that Vittal brought up.

Before Vittal spoke, S.V. Raju, national president of the Indian Liberal Group in his introductory remarks spoke about Minoo Masani and his liberal ideals out of which was born the Indian Liberal Group way back in 1964. He described the origin of the Swatantra party and emphasised the need for independent thinking within political parties, which the Swatantra party allowed. Of the 21 principles of the Swatantra Party, the first 20 principles (covering economic and social objectives) were binding on all members and the 21st principle stated,

The Swatantra party holds that democracy is best served if every political party allows freedom of opinion to its members on all matters outside the fundamental principles of the party. It, therefore, gives its members full liberty on all questions not falling within the scope of the principles stated above.

Raju also introduced G.K. Sundaram (all of 88 years old), chairman of the Lakshmi Mills Company (Coimbatore), a former politician and two time Rajya Sabha member as well as founder member of the Indian Liberal Group. Mr. Sundaram presided over the function and spoke haltingly about corruption being prevalent right from the time of independence describing a few instances:

Motilal Nehru, Sundaram claimed, had taken five lakhs of rupees as a bribe from various textile mill owners in Bombay, when he was a member of the consitutent assembly to help remove a proposed excise tax of 3 paise per square meter on textile exports.

Jagajivan Ram, who Sundaram described as a man who never took a bribe, was once gifted with a silver Taj Mahal miniature by someone who wanted Jagjivan Ram to do something for him. Jagajivan Ram refused the gift, saying he had no need for a Taj Mahal (with his wife being very much alive), and told the person to talk to Jawaharlal Nehru. Nehru apparently asked the person to gift the Taj Mahal to the Congress party and told him never to give money to individuals, but only to the party. Whether Nehru obliged with a quid pro quo or not was left unsaid by Sundaram.

I don't know about the Motilal Nehru example (I would have thought he was rich beyond measure through his law practice and had no need to be corrupt to get money for himself), but the example of Jawarhalal Nehru raising party funds through such means seems more plausible.

Vittal started off with a tribute to Minoo Masani and quoted from Masani's books describing the discordant note struck by Masani and Rajaji in founding the Swatantra Party and pleading for a market economy for India. Masani wrote in an open letter,

Way back in 1959, when Rajai and I founded the Swatantra Party and pleaded for a market economy for India, it was considered politically foolhardy, if not downright foolish for us to go against the then prevailing dogma of socialism. Neverthelss, we persisted because it was already apparent to some of us that the economic policies being followed by Pandit Nehru and his party based on the 'socialistic pattern of society' would lead the country to bankruptcy. Our worst fears came true for the 'socialistic pattern of society' did lead to economic disaster and moral degradation

Vittal recalled Lincoln's famous definition of democracy as a government of the people, by the people and for the people and said our government is certainly of and by the people, but questioned if it was for the people, given the degree of corruption He attributed the growth of a culture of corruption to the "permit license raj" in Nehru's time which resulted in a scarcity of goods and services leading to large scale black marketing. Black money he said "is the oxygen of corruption and corruption is the oxygen of black money," leading to corruption becoming part of the DNA of public life in the country.

In the post-liberalisation era, corruption he said has taken new forms and listed the following:

Corruption in decision/policy making
Vittal mentioned policy making in the Telecom, Power and other sectors where corruption creeps into the framing of policies to benefit certain parties over others. He also pointed to the various Mega and Fast Track projects for which clearances are required from the authorities, as another instance with scope for corruption

Corruption in Capital Markets
Vittal pointed to the various scams that have ridden the capital markets starting from the Harshad Mehta scam, the Bansali scam, the vanishing companies scam, the Ketan Parekh scam and the UTI scam.

The culture of consultants
Vittal said that the project costs for various Mega projects were boosted to cover the payments made to consultants who were charged with preparing detailed project reports with substantial monies being paid to them for doing so. This he pointed provided room for corruption.

But he struck a positive note by pointing out how despite corruption appearing to mock at the liberalisation process, there are silver linings that are beginning to show. He listed the following positive changes that are underway.

All candidates for elections have to disclose their educational and criminal backgrounds and disclose all their assets, which will help voters know more about the candidates before making choices. Vittal also mentioned that cynics like Cho Ramaswamy feel that the only change now will be that people will elect criminals, knowing that they are criminals. But Vittal's retort to that was that the cynics of the world rarely bring about change - its only the idealists who do so.

Changes are underway to bring about greater transparency to the funding of political parties and the financing of elections.

The Right to Information Act enacted in many states and also by the Centre is a move towards bring greater awareness of the government's activities and spending, allowing citizens to assert their rights.

The anti-defection legislation is another step in the right direction

The passing of the CVC act has helped reduce corruption.

Chandrababu Naidu's acceptance in tote of the anti-corruption package recommended by a Commission of People Empowerment that he set up in Andhra Pradesh.

E-governance initiatives that help to minimise the extent of contact between the citizen and the government, thereby removing opportunities for corruption.

Exim banks studies from a few years ago indicated that the transaction costs (an euphemism for corruption) were adding a cost of 5-25% to the exports of goods and services. A similar post-liberalisation study by the Exim bank indicates that the transaction costs have dropped by 50% since the last study!

In a question-answer session that followed the lecture, Vittal made some interesting points:

To a question on whether our large population was the most pressing problem, Vittal argued otherwise and felt that we need to grow the cake. Development, he said, was the best antidote to population growth.

Educating people on their rights is the best way to check corrupt politicians

There are 5 thoughts of famous people that Vittal said were the basis for his own optimistic outlook on reducing corruption.

Bertrand Russell's statement that "Every opinion becomes respectable if you hold it for a sufficiently long time"

Victor Hugo, who said "There's nothing more powerful than an idea who's time has come"

Alexander de Tocqueville who said "The inevitable becomes intolerable the moment it is perceived as no more inevitable"

Bernard Shaw who said "Every reasonable man adjusts to the world as it is and lives a peaceful life. The unreasonable man wants the world to change to his way of thinking and in the process
achieves success"

Michaelangelo when asked how he was able to sculpt such masterpieces from a shapeless stone said he had the statue in his mind and went on removing from the marble what ever was not part of the statue and what was left was the statue.

In his talk, Vittal referred to Minoo Masani's two volume autobiography which I am now keen to lay my hands on.